A PROJECT REPORT On

WORKING CAPITAL MANAGEMENT

At

CADBURY INDIA PVT.LTD

Submitted to Jiwaji University Gwalior

For the partial fulfillment of the award of Master of Business Administration (2012-2014)

Submitted by Monika Morya

PRESTIGE INSTITUTE OF MANAGEMENT GWALIOR(M.P)

DECLARATION
I Monika Morya, student of Master of Business Administration second semester section A of Prestige Institute of Management Gwalior hereby declare that this report entitled WORKING CAPITAL MANAGEMENT is prepared by me and the facts and information which furnished in this report are my own efforts and is not submitted elsewhere for any award of degree and diploma. And this piece of work is fully original.

Date:
Place:

MONIKA MORYA

CERTIFICATE
This is to certify that Ms. Monika Morya, student of Master of Business Administration programme has completed her summer training of 6 weeks (from 1st June to 15th July) and prepared this report under my guidance. WORKING CAPITAL MANAGEMENT

Prof. Amitabha Maheswari Faculty Guide

ACKNOWLEDGEMENT

This project would be incomplete without the expression of words of simple gratitude to the people who made it possible, so before we get deep into the project I take this opportunity to thank them all who directly or indirectly helped me a lot to complete this project successfully. I take great pleasure to thank and acknowledgement the permission and allowance by Mr.Atul Shukla., Personal Manager, Cadbury Malanpur, Bhind, Madhya Pradesh and his help and inspiration provided. I extend a whole hearted thanks to Mr. Piyush Adukia, Finance Manager under whom I worked and learned a lot and for enlightening me with their knowledge and experience to grow with the corporate working I wish to acknowledge my specific indebtness to director Dr.S.S. Bhakar of Prestige Institute of Management (GWL) who made this opportunity to perform summer training as a part of MBA Course.

I would also like to thanks to my faculty guide Prof. Amitabha Maheshwari who give guideline to prepare this report.

. Their guidance at every stage of the Project enabled me to successfully complete this project which otherwise would not have been possible without their constant encouragement and motivation, without the support it was not possible for me to complete the report with fullest endeavor. I would also like to extend my thanks to my College Faculty Members and placement cell officers who supported me in carry out my operation successfully and generously and provided me vital information/ training regarding the my project objective. I would also grateful to my seniors who gave me information about my topic and helped me and gave me their support. Last but not least I am grateful to my beloved parents and friends who have been constant source of inspiration to me. Monika Morya MBA 2ndSec.

PREFACE
Learning categorizes you and practicing on that learning specialize you. Practice orientation of management student is must generating competence to deal with issues at grass root level; it is for this reason that two months summer training is prescribed as a part of syllabus for MBA course. This training is the mode of imparting practical knowledge to the student. The objective is to provide a deep insight into practical aspects of the functioning of the organization. The training apprises the student to the actual function, responsibility and problems faced by an organization. It provides us with the knowledge of the various kinds of problem that crop up in the day to day functioning of the organization .The way they are solved by the departments and appraisal of the crucial decision taken by the manager at the crucial time. This has given me an altogether new experience, which would be an immense help to me in my days to come.

Table of content

Sr.No.
1

Particulars History of the organization & its objectives Organization Structure Financial Performance Personnel Policies Product and Operations Layout and Quality Control Marketing Strength and Weakness Special Points Chapter -1 introduction of the concept Chapter -2 object of the study Chapter-3results and discussion Chapter -4 suggestion and implication Chapter-5 conclusion

Page no.

2 3 4 5

6 7

9 10 11 12 13 14

History of the organization & its objectives

Cadbury began its operations in 1948 by importing chocolates and then re-packing them before distribution in the Indian market. After 59 years of existence, it today has five company-owned manufacturing facilities at Thane, Induri (Pune) and Malanpur (Gwalior) , Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota and Chennai). The corporate office is in Mumbai. Our core purpose Working together to create brands people love captures the spirit of what we are trying to achieve as a business. We collaborate and work as teams to convert products into brands. Simply put, we spread happiness! Currently Cadbury India operates in three sectors viz. Chocolate Confectionery, milk food Drinks and in the Candy category.

In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years. Some of the key brands are Cadbury Dairy Milk, 5 Star, Perk, clairs and Celebrations. Cadbury enjoys a value market share of over 70% the highest Cadbury brand share in the world! Our flagship brand Cadbury Dairy Milk is considered the gold standard for chocolates in India. The pure taste of CDM defines the chocolate taste for the Indian consumer. In the Milk food drinks segment our main product is Bourn vita the leading Malted Food Drink (MFD) in the country. Similarly in the medicated candy category Halls is the undisputed leader. We recently entered the gums category with the launch of our worldwide dominant bubble gum brand Bubbaloo. Bubbaloo is sold in 25 countries worldwide. The Cadbury India Brand Strategy has received consistent support through simple but imaginative extensions to product categories and distribution. A good example of this is the development of Bytes. Crispy wafers filled with coca cream in the form of a bagged snack, Bytes is positioned as The new concept of sweet snacking. It delivers the taste of chocolate in the form of a light snack, and thus heralds the entry of Cadbury India into the growing bagged Snack Market, which has been dominated until now by Salted Bagged Snack Brands. Bytes were first launched in South India in 2003.

MALANPUR FACTORY In 1989 the company stated manufacturing operations from its third and newest factory at Malanpur near Gwalior in M.P.

Using the most modern state of the art technology, the unit today manufactures range of liquid milk chocolate and a variety of enrobed chocolate products.

Factory in 8 phases 1988-89 1994-95 1997 2001 2005 2006 2008 2009 clairs & Gems 5 Star Perk Chocolate expansion Fruity Gems Ultra Perk Short clair Sticks

LOCATION Telephone No. Parent Company

: Plot No. 25, Malanpur Industrial area, Malanpur : 07539-83803, 83804 : Cadbury Schweppes International UK

distt. Bhind.

Total Area 24 Acres Constructed 8.5 Acre

HISTORY OF ORGANISATION Fifty years ago, the real taste of chocolate as we know it today, landed on Indian shores. An event that carried forward the entrepreneurship and vision born as far back as 1824, when John Cadbury set up shop in Birmingham (UK) to sell among other things his own cocoa concoction. From these modest beginnings emerged Cadbury Schweppes that is today the leading manufacturer of confectionery and beverages in the United Kingdom. A company that has its presence in over 200 countries worldwide and has made the name Cadbury synonymous with cocoa products in countries across the planet.

This is the brand that came to India in 1947 to a nation that was in its infancy, a market that was ready for the world and a people that were open to new ideas, new products.

Within a year of being set up as a trading concern, Cadbury fry India was incorporated as a Private Limited company, set up for processing imported chocolates and Bourn vita. The same year saw the launch of Cadburys Milk chocolate for millions of Indians.

Through 50 years of investment in capital and marketing, the scale and scope of our operations has expanded to cover a range of brands in the chocolate, sugar confectionery and malted food drinks segments. We have a majority share in the Indian chocolate market and a significant presence in sugar confectionery and food drinks. Today Cadbury India Ltd, a subsidiary of Cadbury Schweppes employs over 200 people across the country. And operates in one of the fastest growing chocolate markets for Cadbury Schweppes group across the globe.

Organization Structure

Chairman

C Y Pal Chairman - Non Executive Anand Kripalu Managing Director

Managing Director

Non-Executive Directors

Harsh Mariwala Radhakrishnan B. Menon Suresh Talwar

Executive Directors

Atul Bhatia Executive Director Science & Technology

Rajesh Garg Executive Director Finance & Commercial

Jaiboy Phillips Executive Director - Supply Chain Sanjay Purohit Executive Director Marketing

Sunil Sethi Executive Director Sales & Customer Development

Senior management

Sr.no.

Name

Designation
Vice president morden trade

Ashish Pisharodi

Rajesh Ramanathan Shivanand Sanadi

Vice president people & talent Vice president legal affairs

Vivek Sarbhai

Vice president logistic &customer operations

Sanjay Kurup

VP - Manufacturing (Baddi)

Dharmesh Joshi

Vice President Manufacturing Development

Monaz Noble

Company Secretary

Dr. Shantanu Samant

Vice President Science & Technology

Financial Performance
Finance holds the key to all human activity. Finance department of malanpur factory is also working in the same direction and with the same objective but it has some limitation

because most of the importance finance related matter are directly dealt and finalized by the central finance department in the Mumbai head office. Factory finance department always endeavors of maximizing the profit of high company through two possible ways:

1. Reduction in cost 2. Increase in Sales

FINANCIAL FUNCTIONS 1. Preparing variance report a) Material user variance report b) Packaging material user variance report

2. Production report 3. Excise related matter 4. Export related matter 5. Payment to small engineering items and other goods.

SOURCES OF FINANCE
Share holders Fund Shareholder funds is all the money belonging to common stock shareholders which includes the balance of share capital, all profits retained and money classified as reserves.

 Loan Funds A Loan Fund is a source of money from which loans are made for small business development projects. A loan is made to one person or business at a time and, as repayments are made, funds become available for new loans to other businesses. Hence, the money revolves from one person or business to another. Deferred Tax Liabilities An CADBURYount on a company's balance sheet that is a result of temporary differences between the company's CADBURYounting and tax carrying values, the anticipated and enacted income tax rate, and estimated taxes payable for the current year. This liability may or may not be realized during any given year, which makes the deferred status appropriate.

Methods or Devices of Financial Analysis:

A Number of methods or devices are used to study the relationship between different statements. The following methods of analysis are generally used: i. ii. iii. iv. v. vi. vii. Comparative statements Trend analysis Common size statements Funds flow analysis Cash flow analysis Ratio analysis Cost-volume-profit analysis In this project the Comparative Statement and Ratio Analysis is used to study the financial statement of Orissa State Co-operative Bank Ltd.

Comparative statements:
The comparative financial statements are statements of the financial position at different periods of time. The elements of financial position are shown in a comparative form so as to give an idea of financial position at two or more periods. Any statement prepared in a comparative form will be covered in comparative statements. From practical point of view generally, two financial statements 1. Balance Sheet 2. Income Statement

Comparative balance sheet

The comparative balance sheet analysis is the study of the trend of the same items, group of items and computed items, group of items and computed items in two or more balance sheets of the same business enterprise on different dates. The changes in periodic balance sheet items reflect the conduct of a business. The changes can be observed by comparison of the balance sheet at the beginning and at the end of a period and these changes can help in forming an opinion about the progress of an enterprise. The comparative balance sheet has two columns for the data of original balance sheets. A third column is used to show this increase in figures. The fourth column may be added for giving percentage of increases and decreases.

Guidelines for Interpretation of Comparative Balance Sheet:

While interpreting comparative balance sheet the interpreter is expected to study the following aspects: 1. Current Financial Position and Liquidity Position 2. Long term Financial Position 3. Profitability of the Concern

1. For studying the Financial Position and short term Financial Position of a concern, one sees the working capital in both the years. The excess of current assets over current liabilities will give the figure of working capital. The increase in working capital means improvement in the current financial position of the business. An increase in current assets CADBURYompanied by the increase in current liabilities of the same amount will not show any improvement in short term financial position. One should study the increase or decrease in current assets and current liabilities and this will enable him to analyse the current financial position. The second aspect which should be studied in current financial position is the liquidity position of the concern. If liquid assets like cash in hand, cash at bank, bills receivable, debtors, etc. show an increase in the second year over the first year, this will improve the liquidity position of the concern. The increase in inventory can be on CADBURYount of CADBURY umulation of stocks for want of customers, decrease in demand or inadequate sales promotion efforts. An increase in inventory may increase working capital of the business but it will not be good for business.

2. The long term financial position of the concern can be analysed by studying the changes in fixed assets, long term liabilities and capital. The proper financial policy of concern will be to finance fixed assets by the issue of either long-term securities such as debentures, bonds, loans from financial institutions or issue of fresh share capital. An increase in fixed assets should be compared to the increase in long term loans and capital. If the increase in fixed assets is more than the long term securities then parts of fixed assets have not only been financed from long term sources. A wise

policy will be to finance fixed assets by raising long term funds.

3. The new aspects to be studied in a comparative balance sheet questions is the profitability of the concern. The study of increase or decrease in retained earnings, various resources and surpluses, etc. will enable the interpreter to see whether the profitability has improved or not. An increase in the balance of profit and loss CADBURYount and the other resources created from profits will mean an increase in profitability to the concern. The decrease in such CADBURYounts may mean issue dividend, issue of bonus share or deterioration in profitability of the concern.

4. After studying various assets and liabilities an opinion should be formed about the financial position of the concern. One cannot say if short term financial position is good then long term financial position will also be good or vice versa. A concluding word about the overall financial position must be given at the end.

Comparative Income Statement:

The income statement gives the results of the operation of a business. The comparative income statement gives an idea of the progress of a business over a period of time. The changes in absolute data in money values and percentages can be determined to analyse the profitability of the business. Like comparative balance sheet income statement also has four columns. First two columns give figures of various items for two years. Third and fourth columns are used to show increase or decrease in figures in absolute amounts and percentages respectively.

Guidelines for Interpretation of Comparative Income Statement:

The analysis and interpretation of income statement will involve the following steps:

1. The increase or decrease in sales should be compared with the increase or decrease in costs of goods sold. An increase in sales will not always mean an increase in profit.

The profitability will improve if increase in sales is more than increase in costs of goods sold. The amount of gross profit should be studied in the first step.

2. The second step of analysis should be the operational profits. The operating expenses such as office and administrative expenses, selling and distribution expenses should be deducted from gross profit to find out operating profits. An increase in operating profit will result from the increase in sales position and control of operating expenses. A decrease in operating profit may be due to an increase in operating expenses or decrease in sales. The change in individual expenses should also be studied. Some expenses may increase due to the expansion of business activities while others may go up due to managerial inefficiency.

3. The increase or decrease in net profit will give an idea about the overall profitability of the concern. Non operating expenses such as interest paid, losses from sales of assets, writing off deferred expenses, payment of tax, etc. decrease the figure of operating profit. When all non-operating expenses are deducted from operational profit, we get a figure of net profit. Some non operating incomes may also be there which will increase net profit. An increase in net profit will gave us an idea about the progress of the concern. 4. An opinion should be formed about profitability of the concern and it should be given at the end. It should be mentioned whether the overall profitability of the concern is good or not.

Focus of Financial Statement Analysis:

Financial statement analysis involves evaluating different aspects of a business enterprise, which are of great importance to different users such as management, investors, creditors, bankers, analyst, investment advisers, etc. generally, the following analyses are made while making Financial Statement Analysis.

1. Liquidity or short term solvency analysis 2. Profitability analysis 3. Capital structure or gearing analysis 4. Market strength or investor analysis 5. Growth and stability analysis

Application of Financial Analysis:

Following are the application of financial analysis: 1. Assessing Corporate Excellence 2. Judging credit worthiness 3. Forecasting bankruptcy 4. Valuing equity shares 5. Predicting bonds ratings 6. Estimating market risk

Limitations of Financial Statement Analysis

Financial analysis is a powerful mechanism of determining financial strengths and weakness of a firm. But, the analysis is based on the information available in the financial statements. Thus, the financial analysis suffers from serious inherent limitations of financial statements. The financial analyst has also be careful about the impact of price level changes, windows dressing of financial statements, changes in the CADBURYounting policies of a firm, CADBURYounting concepts and conventions, and personal judgement, etc. The readers are advised to relate the limitations of financial statements as given in the previous chapter and also the limitations of ratios as a tool of financial analysis as discussed in Ratio Analysis. Some of the important limitations of financial analysis are, however, summed up as below: i. ii. It is only a study of interim reports. Financial analysis is based upon only monetary information and non-monetary factors are ignored. iii. It does not consider changes in price levels.

iv.

As the financial statements are prepared on the basis of a going concern, it does not give exact position. Thus CADBURYounting concepts and conventions cause a serious limitation to financial analysis.

v.

Changes in CADBURYounting procedure by a firm may often make financial analysis misleading.

vi.

Analysis is only a means and not an end in itself. The analyst has to make interpretation and draw his own conclusions. Different people may interpret the same analysis in different ways.

Personnel Policies
SOURCES OF RECRUITMENT
CADBURY offers employment opportunities in a wide range of functions. The process of recruitment in CADBURY is fair and transparent, with adequate opportunities to look for suitable candidates both internally and from outside. Recruitment is a continuous process in CADBURY. They regularly hold walk-in interviews in principal cities. Campus interviews are arranged in leading institutes and universities. In other cases, applications are invited for specific vacancies announced through advertisements in leading newspapers or announced in this website. However some of the sources are as follows: TRANSFERS The employees are transferred from one department to another CADBURY ording to their efficiency and experience in CADBURY limited PROMOTIONS

the employees are promoted from one department to another with more benefits and greater responsibility based on efficiency and experience. PRESS ADVERTISEMENTS Advertisements of the vacancy in newspapers and journals are a widely used source of recruitment in the company. The main advantage of this method is that it has a wide reach, so it is used by CADBURY limited EDUCATIONAL INSTITUTES various management institutes, engineering colleges, medical Colleges etc. are a good source of recruiting well qualified executives, engineers, etc. They provide facilities for campus interviews and plas. This source is known as Campus Recruitment and it is also used by the company LABOUR CONTRACTORS Manual workers can be recruited through contractors who maintain close contacts with the sources of such workers. This source is used to recruit labor for construction jobs. however child labor is not used by the company RECRUITMENT Recruitment in CADBURY is a very fair and transparent process with adequate opportunities to look for suitable candidates internally as well as from outside. Applicants are generally invited on the basis of specific advertisements in newspapers and websites. A Committee of officers called the Central Recruitment Committee handles the entire recruitment process comprising screening of applications, preliminary short-listing, interviews and final selection. Every attempt is made to make the selection process as objective as possible by incorporating tests of competence. In some cases, outside consultants are retained. All decisions of the recruitment committee are recorded in respect of each candidate. Candidates are informed of their short-listing and selection immediately after the interview or at the earliest thereafter.

The process of Recruitment in CADBURY Ltd

1. Identify vacancy 2. Prepare job description and person specification 3. Advertising the vacancy 4. Managing the response 5. Short-listing 6. Arrange interviews

TRAINING AND DEVELOPMENT PROGRAMME OF THE COMPANY Our new Performance Management System incorporates a process called Competency Assessment and Training and Developmental Needs wherein appraisers are specifically called upon to identify and assess training needs of employees at specific intervals that do not coincide with Performance Appraisals. This is so that training needs can be assessed objectively. Training is imparted to take care of an individuals career development as well as functional and skill enhan. Competency and Development training inputs include Skill and general performance enhan, communication skills and Career development. Functional training needs are identified and conducted by functional departments while Corporate HR organizes competency and developmental inputs.

BENEFITS OF COMPENSATION SYSTEM Employee welfare receives prime attention at CADBURY. We have several schemes for general welfare of employees and their families. These cover education, healthcare, retirement benefits, loans and financial assistance and recreation facilities.

 Education Education is imparted not only to children of CADBURY employees but also more importantly to children from rural areas who do not have CADBURYess to any medium of information or education. CADBURY schools maintain high standards and are open to other children of the vicinity. Often these schools are the most preferred centres of learning in the district and adjoining areas. Wherever possible, CADBURY provides funds and infrastructure to help set up local schools, colleges and centres for learning and education.CADBURY townships have excellent schools that are often the best in the district. Education at these schools is subsidized for employees wards. They offer attractive scholarship allowances for children studying at places away from their parents, merit scholarships for outstanding children and financial assistance for employees children to pursue higher professional education. Health Care Liberal medical benefits are made available to employees and their family members by way of reimbursements towards normal medical treatment, domiciliary treatments and special sanctions for serious illness. Each of their townships has well-equipped health care centres with qualified medical staff and facilities, ambulance, referrals and tie-ups with reputed hospitals for specialised treatment. In addition, there are regular health checkups, camps and programmes. CADBURY takes pride in providing various forms of medical assistance to the families of their employees and also to all those living in surrounding villages. Each factory has a medical centre with full-fledged doctors and the latest of basic equipment. Mobile medical services are provided in the vicinity and regular medical camps are held to eradicate diseases, offer medical help, treatment and preventive care. Financial Assistance Employees are eligible to apply for loans and financial assistance for various purposes such as purchase of assets, residential premises as well as a scheme that provides for supply of at subsidized rates to those building their own houses.

 CADBURY ommodation At our plants and factories, employees are provided furnished and unfurnished CADBURYommodation based on their entitlements. At many locations, the employees are given free electricity, free water supply and free bus facility for nearby places and schools. These houses are well-maintained and periodically upgraded. Employee Satisfaction In addition to periodic internal Employee Satisfaction Surveys, They participate in Employee Satisfaction and Work Places Surveys conducted by reputed external agencies and organisations like Hewitt Associates Grow Talent. And from time to time, CADBURY has also retained reputed firms like Mercer and Boston Consulting Group to study our internal work environment and employee policies and suggest areas of improvement.

They share below salient points of the latest survey of employees: People are treated fairly regardless of religion and gender CADBURY is a safe place to work Management is competent in running business Employees feel good about what we do for society Proud to tell others I work here Management thinks positively

Product and Operations

MALANPUR FACTORY PRODUCTS RANGE These are as following: Intermediate

Liquid milk chocolate

 Panned chocolate

Gems

5-star

Perk

Ultra perk

clairs

PRODUCT OF MALANPUR FACTROY The story of Cadbury Dairy Milk started way back in 1905 at Bourneville, U.K., but the journey with chocolate lovers in India began in 1948. The pure taste of Cadbury Dairy Milk is the taste most Indians crave for when they think of Cadbury Dairy Recently, Cadbury Dairy Milk Desserts was launched, specifically to cater to the urge for 'something sweet' after meals. Cadbury Dairy Milk has exciting products on offer - Cadbury Dairy Milk Wowie, chocolate

with Disney characters embossed in it, and Cadbury Dairy Milk 2 in 1, a delightful combination of milk chocolate and white chocolate. Giving consumers an exciting reason to keep coming back into the fun filled world of Cadbury. Both milk and plain chocolate, which has had sugar and cocoa butter added to the mass before pulverizing, undergo the same final special production stages, producing the famous smoothness, gloss and snap of Cadbury chocolate.

Layout and Quality Control

PRODUCTION LAYOUT manufacturing need process layout for raw-material preparation, which require crushing, grinding and mixing of the various raw materials such as lime-stone, clay, bauxite and ironore. Once the raw materials are prepared and converted into raw-meal by mixing different raw materials in predetermined proportion, production processes such as pre-heating, precalcining, calcinations for conversion of raw meal into clinker and cooling of clinker would use product layout. Within the plant, workshop activities are arranged by using process layout, whereas the packing and dispatch operations of the through trucks need

product layout. In cases of repairs of kiln in plant, which cannot be moved, a fixed layout is to be used.

OTHER RAW MATERIALS- DIFFRENT SUPPLIERS IN DIFFRENT PLANT They have implemented a SAP based Enterprise Resource Planning (ERP) system for the Procurement function. Central procurement is divided into the following major groups: Raw materials Energy, Fuels and Gases Maintenance spares Wearing parts, Consumable materials Administrative & office supplies Services Packing

The structure provides for procurement managers at regional level and plants. There is a Separate projects head for procurement of capital equipment and purchases.

SUPPLIER RELATIONSHIPS CADBURY treats its vendors as business associates. All vendors are treated with respect and dignity. Our vendor base includes reputed manufacturers and trusted brand names, usually the leading 3-4 vendors of their particular industry segment who are technically and financially sound and have the intrinsic capacity to supply material of desired quality and on time. CADBURY prefers vendors who demonstrate good corporate citizenship and promote sustainable development. Adequate care is taken to ensure transparency in procurement processes. Our procurement policy has a clearly defined code of practice for procurement conduct and encourages fair and open competition in markets.

QUALITY CONCEPT USED BY THE COMPANY Product Development has always been an important activity at CADBURY, arising out of a

focus on quality and process improvement. It has been a constant partner, driving research, innovation and evaluation.

CADBURY has effectively pledged its reputation as the market leader in the quality of . Maintaining this lead calls for harnessing the resources and expertise of the company - from applied research and production to marketing. CADBURYordingly, all CADBURY factories are equipped with state-of-the-art process control instrumentation and associated quality control and testing laboratories manned by qualified personnel.

As a result of this focus on quality, CADBURY specifications exceed those set by BIS by a wide margin. Today, all CADBURY plants have the ISO 9001 Quality Systems

certification. This demonstrates our tradition of providing reliable and consistent quality through the application of modern technology, and justifies the preferences of a nationwide customer base Quality Objective

Reduction in Rejection, rework On time delivery Customer Complaint towards zero Reduce tool cost Minimizing down time

Marketing
INTRODUCTION AND IMPORTANCE OF MARKETING STRATEGIES

Marketing is a process allow an

strategy that can

organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable advantage. A marketing strategy should be centred on the key concept that customer satisfaction is the main goal. Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.

PRODUCT Satisfaction suffices. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. But

the winner will surpass them by constantly exceeding her expectation, delivering to her door step additional benefits which she would never have imagined possible. Cadburys offer such product. The wide variety products offered by the company include: I. Chocolate & Confectionary II. Beverages III. Food Drinks

Pricing Make no mistake. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Cadburys

is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Cadburys has launched various products which cater to all customer segments. So every customer segment has different price expectation from the product. Therefore maximizing the returns involves identifying right price level for each segment, and then progressively moving through them.

Place BRAND ISNT THE ONLY ANY MORE. Marketers and finance manager need a new term to evaluate their business:

Distribution Equity. It takes much more time and effort to build, but once built, distribution equity is much together to erode. The fundamental axiom of Indian consumer market is this: You can set up a state-of the-art manufacturing facility, hire the hottest strategies on the block, swamp prime television with best Ads, but the end of it all, you would be know of selling your products. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. Buyers are paying for distribution equity not brand equity and market shares. Why does the company need distribution equity more anything in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique product differentiation for ling period. In a product and price parity situation, the brand that sells more is the one that reaches the highest number of customers. India 1 billion people, 155 million household has over 4 million retail outlets in 5351 urban markets and 552725 villages, spread cross 3.28 million sq. km. television has already primed and population for consumption, and the marketer who can get to the to the consumer ahead of competition will give a hard to overtake lead. But getting their means managing wildly different terrains-climate, language, value system, life style, transport and communication

network. And your brand equity isnt going to help when it comes to tackling these issues. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. Once the stock product reaches retailers, the prospective customers can have access to the product. Cadburys distributes the product in the manner stated above. Cadburys distribution network has expanded from 1990 distributors last year to 2100 distributors and 4,50,000 retailers. Beside use of TI tom improves logistics, Cadbury is also attempting to improve the distribution quality. To address the issue of product stability, it has installed visi colors at several outlets. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes. Looking at the low penetration of the chocolate, a distribution expansion would itself being incremental volume. The other reason is arch rival Nestle reaches more than a million retailers. This increase in distribution is going to be accompanied by reduction in channel costs. Cadburys marketing costs, at 18% of total costs, is much higher than Nestls 12% or even pure sugar confectionery major Parrys 11%. The company is looking to reduce this parity level. At Cadbury, they believe that selling confectionery is it like selling soft drinks. Promotion If an advertisement is to communicate effectively, the receiver must at least half want it to, and be prepared too take step toward the sender. Effective advertising is rarely hectoring or loudly explicit. It often both attracts and generates arm feelings. More often than not, a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. To penetrate into the inner recesses of her memory, communication must first ensure exposure, grab her attention evoke her comprehension, grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same.

Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. The strategic response address the emotional appeal of the band to the child within the adult. Naturally, that produced just the value vacuum that Cadbury was looking to fill. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful, unself conscious, pleasure seeking child within himself a graft these feeling onto the Ad campaign like Khane Walon Ko Khane Ka Bahana Chahiye for CMD and Thodi Si Pet Pooja Kabhi Bhi Kahin Bhi for Perk have been sure shot winner with the audience.

Strength and Weakness

Strengths

Cadbury is the largest global confectionery supplier, with 9.9% of global market share.

Strong manufacturing competence, established brand name and leader in innovation. Advantage that it is totally focused on chocolate, candy, chewing gum, unique understanding of consumer in these segments.

Weaknesses

The company is dependent on the confectionery and beverage market, whereas other competitors e.g. nestle have a more diverse product portfolio, where profits can be used to invest in other areas of the business and R&D.

Other competitors have greater international experience - Cadbury has traditionally been strong in Europe. New to the US, possible lack of understanding of the new emerging markets compared to competitors.

Special Points

No. 1 FMCG Company Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG company in India in 2008, by the Great Place to Work Institute.

Great Place to Work 2007' Cadbury India' has been awarded the "Bronze Award for Excellence in People Management" in the 'Great Place to Work 2007' survey conducted by Grow Talent Company Limited and Business world. The award recognizes

Cadbury

India

received

bronze

award

at

the

Cannes

Lions International

Advertising Festival for partnering with a mobile phone operator in 2005 to provide exam results via SMS to school children.

Reader's Digest Award recognizes Bourn vita

Bourn vita won the 'Reader's Digest Trusted Brands' Gold Award for the vitamin health supplement category in Indian in 2006. The merit was based on 7000 responses from questionnaires and telephone interviews across Asia. Suraksha Puraskar Award 2005 Cadbury India's Bangalore factory has received the

"Suraksha Puraskar" safety award from the National Safety Council - Karnataka chapter. ABBY Award wins for India.

The prestigious ABBY awards, held in March, recognize creative excellence in the Indian Advertising Industry. The Ultra

Perk campaign won four Silver Awards in total and the Cadbury Dairy Milk Campaign, Miss Palampur, also won a Silver Award. This year Cadbury also sponsored the new 'Young ABBY' Award.

Cadbury wins the Effies 2006 At the recent Effie 2006 awards organized by The Advertising Club of Mumbai, our 'Pappu Pass Ho Gaya' advertising campaign bagged two more awards - Gold in the Consumer Products category and Silver in the integrated advertising campaign category.

Chapter -1 Introduction of the concept

THEORY OF WORKING CAPITAL

MEANING OF WORKING CAPITAL: Capital required for a business can be classifies under two main categories: Fixed Capital Working Capital

Every business needs funds for two purposes for its establishments and to carry out day to day operations. Long term funds are required to create production facilities through purchase of fixed assets such as plant and machinery, land and building, furniture etc. Investments in these assets are representing that part of firms capital which is blocked on a permanent or fixed basis and is called fixed capital. Funds are also needed for short term purposes for the purchasing of raw materials, payments of wages and other day to day expenses etc. These funds are known as working capital. In simple words, Working capital refers to that part of the firms capital which is required for financing short term or current assets such as cash, marketable securities, debtors and inventories. CONCEPTS OF WORKING CAPITAL: There are two concepts of working capital: Balance Sheet concepts Operating Cycle or circular flow concept

BALANCE SHEET CONCEPT: There are two interpretation of working capital under the balance sheet concept: Gross Working Capital Net Working Capital

The term working capital refers to the Gross working capital and represents the amount of funds invested in current assets . Thus, the gross working capital is the capital invested in

total current assets of the enterprises. Current assets are those assets which are converted into cash within short periods of normally one accounting year. Example of current assets is: Constituents of Current Assets: Cash in hand and Bank balance Bills Receivable Sundry Debtors Short term Loans and Advances Inventories of Stock as: Raw Materials Work in Process Stores and Spaces Finished Goods

Temporary Investments of Surplus Funds Prepaid Expenses Accrued Incomes The term working capital refers to the net working capital. Net working capital is the excess of current assets over current liabilities or say: Net Working Capital = Current Assets Current Liabilities. NET WORKING CAPITAL MAY BE NEGATIVE OR POSITIVE: When the current assets exceed the current liabilities, the working capital is positive and the negative working capital results when the current liabilities are more than the current assets. Current liabilities are those liabilities which are intended to be paid in the ordinary course of business within a short period of normally one accounting year of the current assets or the

income of the business. Examples of current liabilities are: CONSTITUENTS OF CURRENT LIBILITIES: Bills Payable Sundry Creditors or Account Payable Accrued or Outstanding Expenses Short term Loans, Advances and Deposits Dividends Payable Bank Overdraft

Provision for Taxation, If does not amount to appropriation of profits

The gross working capital concept is financial or going concern concept whereas net working capital is an accounting concept of working capital. OPERATING CYCLE OR CIRCULATING CASH FORMAT: Working Capital refers to that part of firms capital which is required for financing short term or current assets such as cash, marketable securities, debtors and inventories. Funds thus invested in current assets keep revolving fast and being constantly converted into cash and these cash flows out again in exchange for other current assets. Hence it is also known as revolving or circulating capital. The circular flow concept of working capital is based upon this operating or working capital cycle of a firm. The cycle starts with the purchase of raw material and other resources

And ends with the realization of cash from the sales of finished goods. It involves purchase of raw material and stores, its conversion into stocks of finished goods through work in

progress with progressive increment of labor and service cost, conversion of finished stocks into sales, debtors and receivables and ultimately realization of cash and this cycle continuous again from cash to purchase of raw materials and so on. The speed/ time of duration required to complete one cycle determines the requirements of working capital longer the period of cycle, larger is the requirement of working capital

Receivable conversion period (RCP)

Raw material storage conversion period (RMSCP)

Cash received form Debtors and paid to suppliers Of raw materials

Sales of finished Goods

Raw materials introduced into process

Finished Goods Produced Finished goods conversion Period (FGCP) Work in process Conversion period (WIPCP)

The gross operating cycle of a firm is equal to the length of the inventories and receivables conversion periods. Thus,

Gross Operating Cycle = RMCP + WIPCP + FGCP + RCP

Where, RMCP = Raw Material Conversion Period WIPCP = Work in- Process Conversion Period FGCP = Finished Goods Conversion Period RCP = Receivables Conversion Period However, a firm may acquire some resources on credit and thus defer payments for certain period. In that case, net operating cycle period can be calculated as below:

Net Operating Cycle Period = Gross Operating Cycle Period Payable Deferral period
Further, following formula can be used to determine the conversion periods. Raw Material Conversion Period = Average Stock of Raw Material. Raw Material Consumption per day Work in process Conversion Period = Average Stock of Work-in-Progress Total Cost of Production per day Finished Goods Conversion Period = Average Stock of Finished Goods Total Cost of Goods sold per day Receivables Conversion Period = Average Accounts Receivables Net Credit Sales per day Payable Deferral Period = Average Payable Net Credit Purchase per day

CLASSIFICATION OR KIND OF WORKING CAPITAL:

Working capital may be classified in two ways: On the basis of concept On the basis of time

Om the basis of concept, working capital is classified as gross working capital and net working capital. The classification is important from the point of view of the financial manager. On the basis of time, working capital may be classified as: Permanent or Fixed working capital Temporary or Variable working capital.

Kinds of Working Capital

On the basis of concept

On the basis of time

Gross Working Capital t

Net Working Capital

Permanent or Fixed Working Capital

Temporary or Variable Working Capital

Regular Working Capital

Reserve Working Capital

Special Working Capital

1. PERMANENT OR FIXED WORKING CAPITAL: Permanent or fixed working capital is the minimum amount which is required to ensure effective utilization of fixed facilities and for maintaining the circulation of current assets. There is always a minimum level of current assets which is continuously required by the enterprises to carry out its normal business operations. 2. TEMPRORAY OR VARIABLE WORKING CAPITAL: Temporary or variable working capital is the amount of working capital which is required to meet the seasonal demands and some special exigencies.Varibles working capital can be further classified as second working capital and special working capital. The capital required to meet the seasonal needs of the enterprises is called the seasonal working capital. Temporary working capital differs from permanent working capital in the sense that is required for short periods and cannot be permanently employed gainfully in the business IMPORATNCE OR ADVANTAGE OF ADEQUATE WORKING CAPITAL: Working capital is the life blood and nerve centre of a business . just a circulation of a blood is essential in the human body for maintaining life, working capital is very essential to maintain the smooth running of a business. No business can run successfully without an adequate amount of working capital. The main advantages of maintaining adequate amount of working capital are as follows: Solvency of the Business

Goodwill Easy Loans Cash discounts Regular supply of Raw Materials Regular payments of salaries, wages & other day to day commitments. Exploitation of favorable market conditions Ability of crisis Quick and regular return on investments High morals

THE NEED OR OBJECTS OF WORKING CAPITAL: The need for working capital cannot be emphasized. Every business needs some amount of working capital. The need of working capital arises due to the time gap between production and realization of cash from sales. There is an operating cycle involved in the sales and realization of cash. There are time gaps in purchase of raw materials and production, production and sales, And sales, and realization of cash, thus , working capital is needed for the following purposes: For the purchase of raw materials , components and spaces To pay wages and salaries To incur day to day expenses and overhead costs such as fuel, power and office expenses etc. To meet the selling costs as packing, advertising etc. To provide credit facilities to the customers.

 To maintain the inventories of raw materials, work in- progress, stores and spares and finished stock. FACTORS DETERMING THE WORKING CAPITAL REQUIRMENT: The working capital requirements of a concern depend upon a large number of factors such as nature and size of the business, the characteristics of their operations, the length of production cycle , the rate of stock turnover and the state of economic situation. However the following are the important factors generally influencing the working capital requirements. NATURE OR CHARACTERSTICS OF A BUSINESS: The nature and the

working capital requirement of enterprises are interlinked. While a manufacturing industry has a long cycle of operation of the working capital, the same would be short in an enterprises involve in providing services. The amount required also varies as per the nature, an enterprises involved in production would required more working capital then a service sector enterprise. MANAFACTURE PRODUCTION POLICY: Each enterprises in the

manufacturing sector has its own production policy, some follow the policy of uniform production even if the demand varies from time to time and other may follow the principles of demand based production in which production is based on the demand during the particular phase of time. Accordingly the working capital requirements vary for both of them. OPERATIONS: The requirement of working capital fluctuates for seasonal business. The working capital needs of such business may increase considerably during the busy season and decrease during the

MARKET CONDITION: If there is a high competition in the chosen project category then one shall need to offer sops like credit, immediate delivery of goods etc for which the working capital requirement will be high. Otherwise if there is no competition or less competition in the market then the working capital requirements will be low.

AVABILITY OF RAW MATERIAL: If raw material is readily available then one need not maintain a large stock of the same thereby reducing the working capital investment in the raw material stock . On other hand if raw material is not readily available then a large inventory stocks need to be maintained, there by calling for substantial investment in the same.

GROWTH AND EXAPNSION: Growth and Expansions in the volume of business result in enhancement of the working capital requirements. As business growth and expands it needs a larger amount of the working capital. Normally the needs for increased working capital funds processed growth in business activities.

PRICE LEVEL CHANGES : Generally raising price level require a higher investment in the working capital. With increasing prices, the same levels of current assets needs enhanced investments.

MANAFACTURING CYCLE: The manufacturing cycle starts with the purchase of raw material and is completed with the production of finished goods. If the manufacturing cycle involves a longer period the need for working capital would be

more. At time business needs to estimate the requirement of working capital in advance for proper control and management. The factors discussed above influence the quantum of working capital in the business. The assessment of the working capital requirement is made keeping this factor in view. Each constituents of the working capital retains it form for a certain period and that holding period is determined by the factors discussed above. So for correct assessment of the working capital requirement the duration at various stages of the working capital cycle is estimated. Thereafter proper value is assigned to the respective current assets, depending on its level of completion. The basis for assigning value to each component is given below:

COMPONENTS OF WORKING CAPITAL Stock of Raw Material Stock of Work -in- Process Stock of finished Goods Debtors Cah

BASIS OF VALUATION Purchase of Raw Material At cost of Market value which is lower Cost of Production Cost of Sales or Sales Value Working Expenses

Each constituent of the working capital is valued on the basis of valuation Enumerated above for the holding period estimated. The total of all such valuation becomes the total estimated working capital requirement. The assessment of the working capital should be accurate even in the case of small and micro enterprises where business operation is not very large. We know that working capital has a very close relationship with day-to-day operations of a business. Negligence in proper assessment of the working capital, therefore, can affect the day-to-day operations severely. It may lead to cash crisis and ultimately to liquidation. An inaccurate

assessment of the working capital may cause either under-assessment or over-assessment of the working capital and both of them are dangerous. PRINCIPLES OF WORKING CAPITAL MANAGEMENT POLICY: The following are the general principles of a sound working capital management policy:

PRINCIPLES OF WORKING CAPITAL MANAGEMNT POLICY

PRINCIPLES OF RISK VARIATIONS

PRINCIPLES OF COST OF CAPITAL

PRINCIPLES OF EQUITY PRINCIPLES

PRINCIPLES OF MATURITY OF PAYMENTS

1. PRINCIPLE OF RISK VARAITAION (CURRENT ASSETS POLICY): Risk here refers to the inability of a firm to meet its obligations as and when they become due for payment. Larger investment in current Assets with less dependence on short term borrowings, increase liquidity, reduces risk and thereby decreases the opportunity for gain or loss. On the other hand less investments in current assets with greater dependence on short term borrowings, reduces liquidity and increase profitability. In other words there is a definite inverse relationship between the degree of risk and profitability. In other words, there is a definite inverse relationship between the risk and profitability. A conservative management prefers to minimize risk by maintaining a higher level of current assets or working capital while a liberal management assumes greater risk by reducing working capital. However, the goal of management should be to establish a suitable trade off between profitability and risk. 2. PRINCIPLES OF COST OF CAPITAL: The various source of raising working capital finance have different cost of capital and the degree of risk involved. Generally, higher and

risk however the risk lower is the cost and lower the risk higher is the cost. A sound working capital management should always try to achieve a proper balance between these two.

3.PRINCIPLE OF EQUITY POSITION: The principle is concerned with planning the total investments in current assets. According to this principle, the amount of working capital invested in each component should be adequately justified by a firms equity position. Every rupee invested in current assets should contribute to the net worth of the firm. The level of current assets may be measured with the help of two ratios: 1. Current assets as a percentage of total assets and 2. Current assets as a percentage of total sales While deciding about the composition of current assets, the financial manager may consider the relevant industrial averages. 4. PRINCIPLES OF MATURITY OF PAYMENT: The principle is concerned with planning the source of finance for working capital. According to the principles, a firm should make every effort to relate maturities of payment to its flow of internally generated funds. Maturity pattern of various current obligations is an important factor in risk assumptions and risk assessments. Generally shorter the maturity schedule of current liabilities in relation to expected cash inflows, the greater the inability to meet its obligations in time.

CONSEQUENCES OF UNDER ASSESMENT OF WORKING CAPITAL: Growth may be stunted. It may become difficult for the enterprises to undertake profitable projects due to non availability of working capital. Implementations of operating plans may brome difficult and consequently the profit

goals may not be achieved. Cash crisis may emerge due to paucity of working funds. Optimum capacity utilization of fixed assets may not be achieved due to non availability of the working capital. The business may fail to honour its commitment in time thereby adversely affecting its creditability. This situation may lead to business closure. The business may be compelled to by raw materials on credit and sell finished goods on cash. In the process it may end up with increasing cost of purchase and reducing selling price by offering discounts . both the situation would affect profitable adversely. Now avaibility of stocks due to non availability of funds may result in production stoppage. While underassessment of working capital has disastrous implications on business overassesments of working capital also has its own dangerous. CONSEQUENCES OF OUR OWN ASSESMNET OF WORKING CAPITAL: Excess of working capital may result in un necessary accumulation of inventories. It may lead to offer too liberal credit terms to buyers and very poor recovery system & cash management. It may make management complacent leading to its inefficiency. Over investment in working capital makes capital less productive and may reduce return on investment. Working Capital is very essential for success of business & therefore needs efficient management and control. Each of the components of working capital needs proper management to optimize profit.

Chapter -2 Objective of study

Chapter -3 Finding & Suggestion

FINDING AND SUGGESTION

Making available just adequate quantum of working capital. Some of the existing machinery is new with absolute equipments requiring modernization and rebuilding.

The company should administrate their credit on the basis of certain well recognized and established principle of credit administration.

 The company should maintain an optimum level of cash in the business in order to maintain a proper liquidity in the business.

Chapter -4 CONCLUSION

CONCLUSION Working capital management is an important aspect of any business. Every

business concern should have adequate working capital to run its business operation. Every concern should have neither redundant of excess working capital nor inadequate or shortage of working capital. Both excess as well as short working capital positions are bad for any business.

The three elements of working capital management are cash management receivable management and inventory management. If a finance manager

maintains these three elements of working capital management properly means the concern will get dramatic improvement in their sales volume and also in business. Working capital policies of a firm have a great effect on its profitability, liquidity and structured health of the organization. Every concern should adopt some new tread management strategies that will help in greater productivity, inventory optimization and also better working capital management. So, it is noted that working capital is a means to run business smoothly and profitability. Thus, the concept of working capital has its own important in a going concern.

Chapter -5 CONCLUSION

REFRENCES
WEBSITE www.cadbury.com www.cadburyindia.com www.cadbury.co.uk www.cadburyschweppes.com

www.google.com

BOOKS & MAGAZINES Global Marketing Management (Kiefer Lee & Steve Carter) A L Ries (1996), Focus Harper Collins Publishers Ltd. David A. Aaker (1991), Managing Brand Equity, The Free Press. David A. Aaker (1996) Building Strong Brands, The Free Press. Philip Kotler (Eighth Edition) Marketing Management, Prentice Hall of India Ltd. Advertising and marketing Magazine The Economic Times Brand Equity Company Literature Market survey and questionnaires Business World Business Today